Index Ventures, the European venture capital group best known for investing in Skype, will on Tuesday shrug off the gloom in its industry by announcing it has raised €350m ($440m) for a new fund to invest in early-stage technology companies.
The fundraising shows that top-performing venture capital firms are still able to raise money in spite of the financial crisis that has caused investment in venture capital to dry up since the collapse of Lehman Brothers last October.
Index enjoyed a string of successful exits last year, including MySQL, a Swedish software group bought by Sun Microsystems for $1bn, and Trolltech, a Norwegian software company bought by Nokia for $153m.
It also saw healthy returns from the sale of FilesX, a data-protection software provider bought by IBM, and B-hive, a performance management software company acquired by VMware.
The venture capital industry is facing tough conditions as the market for initial public offerings is effectively shut, and investors have become more cautious with their money.
However, Index developed a reputation as being one of Europe’s top technology investors. It has backed some of Europe’s most promising tech start-ups, such as Lovefilm, the online DVD rental company, and Playfish, the social gaming site.
The new €350m fund was heavily subscribed and raised in only a few months. It is Index’s fifth fund since 1996. More than 90 per cent of investors in its last fund reinvested in the new one.
The company, with offices in Geneva, London and Jersey, is expected to focus a greater portion of the new fund on “clean technology” investments.
Last year, it made one of its first such investments, teaming up with Kleiner Perkins Caufield & Byers to back Lehigh Technologies, a company based near Atlanta that recycles rubber tyres.
Index joins a select few venture capitalists which have raised money recently. Balderton Capital of the UK raised $430m in January, while Silicon Valley’s Accel Partners raised $1bn in December for two technology and media-focused funds.
More recently, Atlas Venture had to stop its fundraising at $283m, well short of the London and Boston company’s $400m target.